quote:Tesla Motors' cut out the middleman approach could spell trouble in North Carolina

quote:Nearly all states -- 48 --require manufacturers to sell their vehicles through dealerships to ensure the companies don't undercut their own network of franchised dealers,

quote:But the automaker can sell in every state because transactions legally take place in California.

quote:Those laws are likely to stay in place, considering franchise dealers account for about 20 percent of the sales-tax base at the state level

There will not be a single state that will lose 20% of its tax base to California. Because once they are allowed to get a foot in the door, cars makers will use the new laws to undercut their dealerships in a heartbeat

Correct me if I'm wrong and I may well be but shouldn't a car sold to someone in a particular state generate a sales tax in that state regardless of is doing the selling? And, if not now, isn't that where the legislation targetting online sales was heading anyway?

Not to mention, how tough really would it be for states to simply pass a law saying when you register a car, if you haven't paid sales tax on that car, you must on registration?

I mean, I hate taxes as much as the next guy but the whole tax thing doesn't really appear to be the hurdle here.

The hurdle here looks to me to be simply a case of a dealer protection racket.

quote:if you haven't paid sales tax on that car, you must on registration?

Since current law prevents it from happening, I assume the Tesla is registered in Cali. Most folks don't rush to get their car registered in a new state, and its value would be greatly reduced since it would be a used car by the time it is registered. Thereby reducing the taxes. And some states don't require registration based on value = a ton of lost revenue in this case